1. Good news! You just won $250,000 in the lottery. You pay off student loans of $60,000 and you are going to splurge and replace that clunker of a car you have been driving by spending 540,000 on a new car. Now you have to figure out what to do with the balance. Your trusted uncle is a financial advisor and says that you should put together a portfolio that is 60% common stock, 20% preferred stock and 20% bonds. He suggests the following securities: 1. ABC Common Stock just paid a dividend of $.50 per share, but things are looking up and the company has announced that its next dividend will be 5.75 per share and that the dividend will grow at 10% per year for the following 3 years. After that the dividend will grow at 5.0% per year forever. The required rate of return on this common stock is 9.5% 1. DEF Preferred Stock which pays an annual 8,5% dividend on its $100 face value. The required rate of return on this preferred stock is 7.4% in XYZ 6.5% Coupon Bondi due March 14, 2028. The bonds pay interest semiannually and have a face value of $1,000. The yoeld to maturity on this bond is 4.895 A. How much of each security is in your portfolio? You may round to the nearest whole security in determining how many of each you bought B. How much in annual income would your investments provide for you during the first year you hold the portfolio? C. The market fluctuates and in four years' time the required rates of retum have changed. (1) the required rate of return on ABC Common Stock Ais 8.1%, (2) the required rate of retum on DEF Preferred Stock is 6.71%, and (3) the YTM on the XYZ 6.5% Coupon Bonds is 5.40% How much would your total vestment porolio be worth four years from now